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Durban – South Africa needs to crystallise whatever edge it has in competition with other emerging markets in the world, according to Mohammed Nalla, head of economic research at the Public Investment Corporation.

“Capital will go where the cost-benefit analysis is the best. For me South Africa is about getting efficiencies out of a very rich resource base, including our financial resources.

"We need to start getting efficiencies out of our labour resource as well,” he said during a panel discussion on the economy during the annual conference of the South African Property Owners’ Association (Sapoa) in Durban.

“We need to get on the same page. There is no common South African narrative. We seem to always approach problems from our polarised narratives. We should also simplify our policies.”

He sees the land issue, where the Department of Land Reform is cutting across other departments, as an example.

“We need to simplify the regulatory framework in order to be able to unleash potential dynamism in the South African economy, he said.

“So far the major ratings agencies have given South Africa a reprieve with their stable outlooks. They are saying that the deterioration the country experienced over the last number of years has paused. They highlight, however, that South Africa needs to address deep structural concerns like SOEs (state-owned entities) and their impact on the fiscus.”

Nalla believes the right skills should be deployed to “turn the ship around”.

“It is too early to tell if we have successfully turned around our SOE strategy,” he said.

He believes much more could also be done around development finance.

“I would argue that the private sector has a distinct role to play here. I am surprised at venture capital being noticeably absent in South Africa,” said Nalla.

“It warrants closer inspection. We have not done enough. We have the ability to do more, but it would require much more coordination.”

Nedbank economist Isaac Matshego, another member of the panel, believes that before the country even tries to attract foreign direct investment, it needs “to keep local money” in the country.

“There have been massive outflows. We saw domestic investors sending money offshore. The country has this huge deficit. We need to boost investment in South Africa. Confidence is a huge issue,” he said.

To this, political analyst and radio host Eusebius McKaiser, who led the panel discussion, responded that an appeal for patriotism is probably not the best business model.